In our view, based on more than 10 years of observing and following what we call “assets of significance,” we found that “assets of significance” set themselves apart by making every dollar or rand of invested capital more valuable over time. Specifically, they generate cash flows that exceed the cost of capital over and over again. This is made possible by three distinguishing features. Firstly, they build dynamism into their DNA’s that enable them to leverage and use headwinds, to lift themselves onto a higher plane, the same way that eagles do. Secondly, they have an unsurpassable ability to create new economic assets and to endow existing economic assets with new “wealth producing potential.” Lastly, they deploy capital, managerial bandwidth, effort and time on profitable endeavours. How do they do this?

When the problem that customers have or the job that they to perform goes away, this takes away the need, willingness to pay and with this, the very existence of firms and industries. In addition to this, when the problem or job to be done gets downgraded in terms of significance and centrality for whatever reason, this changes the economics of the game. Over and above this, when the solution to their problem or job to be done becomes widely available, this also changes the economics and ultimately the operating cashflows that the firm can generate.

In recent times, we have seen the impact of the above mentioned phenomena on “attention” oriented businesses that use information or entertainment assets to attract attention and in turn, sell that attention to advertisers. With the increasing usage of the internet, penetration of screens; mobile, computers and tablets, and the explosion of publishers and aggregators for example, the informations assets changed from physical to digital/intangible. This in turn, changed the way the information assets get delivered as well as the address where the information or news assets are delivered to. Instead of delivering the news product in a physical form to some location; to street vendors who “on-sell” to the man in the street or retailers and grocery stores who “on-sell” to their end customers, subscriptions based deliveries to households and offices, today most news products are delivered onto screens and in real time.

NB: Should you wish to obtain more insights or tools to help you with any of the topics raised above, please engage with us or contact us by using the contact widget on the contact page. Alternatively, get in touch with Kheepe Moremi.

Notes About the Author: Kheepe Lawrence Moremi

Seasoned strategy & market facing professional with strong business acumen, operating experience and entrepreneurial flair. Former founder board member of the Marketing Association of South Africa, former founder marketing director of Brand South Africa, executive lead of customer strategy at Deloitte Digital, Advisor to the Board Chair of Eskom, head of strategy, innovation and marketing at FNB (a division of First Rand Bank), marketing manager at Nedbank, brand manager at African Bank and Procter & Gamble.